While it is not clear what direction “social management” is taking in China, there appears to be greater caution taken in handling unrest as well as improved recognition of the need to address with purpose the fundamental issues driving unrest—rather than simply containing it. There may be no immediate threat to the party’s position, but this does not mean that this situation will not change—and possibly very quickly if it does. The political and economic challenges that China faces, given the present global and domestic situation, will force the CCP to continue adapting to the circumstances. For now, the party has been focusing on tightening control over the spread of information as well as reorganizing the supervision of social management.

The way in which the Hu-led PBSC appears to have decided to put political expediency above principles of law, however, shows the CCP leadership has continued to spurn political reform as well as global norms about good governance. The top priority for General Secretary Hu at this point is to ensure that the maximum number of members of his Communist Youth League Faction will be promoted to senior slots at the 18th Party Congress. This can only be accomplished by striking deals with leaders of the other factions, including those who might be Bo sympathizers. For example, Hu has to win over ex-president Jiang, who still has a considerable say over high-level personnel selections. As a protg of Bo Yibo, Jiang is understood not to favor harsh punishment for Bo Xilai. Hu, who is keen to remain on the Central Military Commission for at least two years beyond his retirement from the Politburo at the 18th CCP Congress, also does not want to alienate generals who are Bo supporters (Apple Daily, June 29; Sina.com.hk, June 27). Horse trading among the disparate cliques has taken place prior to every party congress in recent memory; however, the perpetuation of politics as usual could deal a body blow to the CCPs legitimacy even as demands for change both inside and outside the party have risen to unprecedented levels.

While the opaque selection bargaining makes it impossible to predict the outcomes, there are fewer real options than the rampant uncertainty might suggest, unless the progressively more institutionalized selection process gives way to wholesale change. Such change, however, seems unlikely given the reported needs for compromise.

Hugh White has helped shape strategic thinking in Canberra and Washington by confronting the world as it is, not as we would like it to be, and outlining the choices that need to be made, even if we don’t agree with his conclusions. The thesis of White’s timely and provocative book, The China Choice: Why America Should Share Power (Black Inc.; $29.99), briefly stated, goes like this. China and the whole region, including Australia, have benefited from the peace and stability delivered over more than 40 years by the unchallenged pre-eminence of the United States Navy. According to the IMF, China, the world’s second-largest economy, will overtake the US within five years. Its wealth and dignity compel it to acquire a military capacity worthy of a great power, even though it only spends 2% of GDP on defence compared to the US’s 4.7%.

To cut or not to cut?..Chinese fishing vessels left Panatag Shoal (Scarborough Shoal) in the West Philippine Sea (South China Sea) but they roped off the mouth of its lagoon to prevent other fishermen from getting in, Defense Secretary Voltaire Gazmin said Thursday.

The United States on Friday criticized China’s establishment of a new military garrison in the South China Sea as it called on all sides to lower tensions in the hotly contested waters…China announced last week that it was establishing the tiny city of Sansha and a garrison on an island in the disputed Paracel chain, infuriating Vietnam and the Philippines, which have accused Beijing of intimidation.

Guo Jingjing, who won gold medals for diving at the 2004 and 2008 Olympic Games, will marry Kenneth Fok, the grandson of the late Hong Kong tycoon Henry Fok, in November. Due to an inheritance dispute within Fok’s family, the wedding budget is said to be tight, reports our sister newspaper China Times.

Analysts blame the explosive increase in part on central government housing policies, including a rule in place since 2008 that bars anyone without a local residency permit, including newcomers such as Fang, from buying homes in cities such as Beijing and Shanghai.“There are a lot of willing buyers who don’t qualify” for purchases “and have to rent,” said a Beijing real estate agent with 5i5j Group.
Consumer price inflation, rising wages and demographics have contributed to rising prices tied to higher demand for apartments in growing cities such as Beijing, where according to the Chinese Academy of Social Sciences an average 700,000 people have settled for work after abandoning other parts of the country every year since 2000.

Lennar Corp. (LEN) is close to signing a term sheet with China Development Bank for a $1.7 billion loan package that would revive two stalled real estate projects in San Francisco, Mayor Edwin Lee said.

China’s economy, the world’s second- biggest, is yet to rebound according to one gauge: sales of the luxury watches that business people give to clients and officials to build commercial relationships.
Eleven of 13 shops and chains surveyed in Hong Kong by Bloomberg News reported no pick-up in July in purchases by mainland Chinese customers. Watch, clock and jewelry sales in the city gained 3.1 percent in June from a year earlier, down from a 59 percent increase in the same month in 2011, according to government data released yesterday.

Ex-president’s recent high profile is way of exerting influence on party’s leadership shuffle, analysts say..
Analysts noted Jiang made a similar gesture ahead of the last party congress in 2007.
His public appearances have grown more frequent this year. In May, Jiang created calligraphy for an airport in his hometown. The same month, a picture appeared on the Twitter account of a Bloomberg reporter showing the former president meeting Starbucks chief executive Howard Schultz in Beijing.

Even as it revels in a mounting heap of gold medals at the London Games, China has been troubled by a maelstrom of emotions: pride in its athletes’ achievements mixed with shame and disappointment that a pair of badminton players were disqualified for blatantly throwing a game, and indignation over what many here say are unfounded accusations that a record-breaking swimmer may have been fueled by performance-enhancing drugs.

A Beijing-based American journalist makes a startling discovery in an upcoming book and film on his search for what became of a British submarine that sank off the Chinese coast in the 1930s.
Steven Schwankert learns that China raised the HMS Poseidon in 1972, apparently without telling the British or anyone else.

Though the overall China luxury market is expected to register comparatively strong growth in 2012, roughly 15-20 percent depending on estimates, the tighter political climate surrounding this fall’s leadership change in Beijing and this spring’s Bo Xilai scandal are having the same chilling effect that we saw in summer 2011 following the Guo Meimei online scandal. As Jing Daily wrote last December, these scandals have contributed heavily to the gradual decline of conspicuous consumption in mainland China, and sped up the popularity of more low-key luxury brands and products

The slowdown in Hong Kong (super) luxury goods is a faster decline than other Chinese data. Why so fast? I have a theory given to me by a China watcher. The theory – it turned bad sharply with the ouster of Bo Xilai and now the murder charge on his wife Gu Kailai. Gu Kailai is going to have a hard time avoiding a mobile execution unit. This changes the stakes and it is structural. A half million dollar watch no longer says “look at me”. It says “look at me, I am a kleptocrat”. Thoughts of that beautiful Van Cleef and Arpels hair clip become the last thing that runs through your brain before the bullet.

In the month since the city inaugurated its first new leader in seven years, Leung Chun-ying, his administration has been steadily beset by a series of property-linked scandals—including one that prompted a high-level minister’s arrest and resignation. So fierce has the media glare been that officials have taken to referring wryly to the administration as an overheated kitchen.

who are the sellers?//
Guangzhou’s 21st Century Business Herald reports that there has been frantic trading in secondhand properties. In July, the transaction volume of previously occupied homes in Beijing soared 99.7% year-on-year, or 25.8% sequentially, to 17,130 units.
In July, transactions of new houses in Beijing advanced 30.9% year-on-year, or down 0.2% sequentially, to 11,959 units.
The newspaper reported that driven by panic purchases, housing transactions have remained at a high level in recent months, traditionally an off-season.